Federal EV Tax Credit: Changes Coming in 2024

Starting January 1, 2024, the federal EV tax credit in the US will be transformed into a point of sale rebate, allowing consumers to transfer up to $7,500 in new clean vehicle credit and up to $4,000 in previously owned clean vehicle credit to the car dealer. This will effectively lower the purchase price of the vehicle at the time of sale, eliminating the need to wait until tax return filing. The new rules also remove the requirement for consumers to have tax liability and allow low-income shoppers to benefit from lower monthly payments. Dealers will report sales to the IRS and receive reimbursement within 72 hours, while buyers will receive written confirmation of the credit eligibility. Income and price limits still apply, and used EVs must be for personal use.